Chiroscience shares go on roller-coaster on trial news

Shares in Chiroscience jumped nearly 7 per cent at one stage yesterday after the biotechnology group said it was ready to start human trials of a competitor to British Biotech's Marimastat anti-cancer drug.

Dr John Padfield, chief executive, said they had selected two so-called matrix metalloproteinase (MMP) inhibitors, the same class of drug as the one which recently sent British Biotech to the verge of membership of the FTSE 100 index, for early stage trials in human volunteers starting later this year. But some analysts expressed disappointment the tests were not starting earlier and profit-taking later hit the shares, which have soared from 320.5p in early February. They ended the day down 15.5p at 397p.

Dr Padfield said the importance of drugs of this type in the battle against cancer was becoming more widely appreciated. It was less efficacy and increasingly side effects that was the key question. "The two compounds [we have identified] have shown no undue side effects, particularly with respect to joint pain."

Recent test results from Marimastat showed that up to a third of patients suffered pains in the arms and shoulders after three to five months' use of the drug. Dr Padfield said their tests using monkeys showed no undue side effects after three months of its treatments, code-named D1927 and D2163. "We are confident that it will have a good safety profile in man."

Unlike Marimastat and other MMP drugs, the Chiroscience compound is not based on hydroxamic acid, which appears to be associated with the joint pains, Dr Padfield said. However, he admitted they would not know definitively how the drug performed until it was tested in cancer patients and many analysts said the drug was at a very early stage.

More of the company's immediate hopes are pinned on Levobupivacaine, a more chemically pure form of the long- acting local anaesthetic bupivacaine. Dr Padfield reported "excellent" progress with the drug, with reduced side effects and equivalent anaesthetic potency. Results of recent phase III trials will be published in April and it could be on the market late in 1998, he said. The current market of $200m to $250m could grow to $800m or $900m over the next few years if the drug widens the markets in areas such as eye and dental surgery and post-operative pain.

One analyst said he was a buyer of Chiroscience principally on the back of Levobupivacaine. "We believe the prospects for that account for a significant slug of its present market capitalisation."

Dr Padfield promised news in May of the progress of research with Darwin, the US drug discovery group which brought Microsoft founder Bill Gates in as a shareholder when it was acquired in November.

The shares of two other biotechnology companies fared better yesterday as both Vanguard Medica and Alizyme reported their maiden annual results since floating last year. AIM-listed Alizyme's shares gained 3p to 35.5p yesterday despite news that co-founder and chief executive Andrew Porter was stepping down. He will continue to act as a non-executive director. He is being replaced by Richard Palmer, a former researcher with Glaxo Wellcome, who has been chief operating officer since September. The company announced a pounds 1.02m loss for the six months to December.

Meanwhile, Vanguard saw its shares rise 2.5p to 682.5p after it said SmithKline Beecham had confirmed its intention to take up the world-wide marketing rights for its VML 251 anti-migraine drug. Pre-tax losses rose to pounds 11m for the year to September, from pounds 3.67m before.

The Roslin Institute, the government-financed research centre near Edinburgh which developed Dolly, the cloned sheep, yesterday denied a weekend press report that it was to float on the stock market, writes Magnus Grimond.

The news came as shares in PPL Therapeutics, Roslin's commercial partner in the project, slumped 82.5p to 430p, wiping out some of the gains since soaring after last week's announcement that Dolly had become the first animal to be cloned.